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Applications Modernization and the cost of doing nothing

old_telephone.jpgBy Francisco Fernandes, Solutions Architect, Hewlett Packard Company (Brazil)

 

Technology evolves at an ever increasing pace and even the latest equipment can soon become obsolete. This is true for everything in the IT field, including software, processes, methodologies, and frameworks.  Rapid change has caused many companies to hesitate before investing in modernization. This blog is focused on two key challenges facing organizations today:  the need to modernize just to keep up with technology (and the competition), and conversely, the cost of doing nothing

 

Let’s compare the two extremes relative to technology: organizations that are early adopters of new technology and organizations that simply do not bother to upgrade technologically.  The early adopters believe that by investing early, they will be better prepared to understand and capitalize on the benefits of new technology in the future, even if it does not deliver an immediate ROI.  Those that wait might save money in the short term, but may be saddled with a dated, under-performing IT infrastructure that is increasingly more expensive to maintain.  In short, the difference is the degree to which an organization decides to take a long-term perspective toward investment in technology.

 

This is equally true for applications as it is for hardware, maybe even more.  There is no way to talk about Applications Modernization without talking about legacy applications. Over time, legacy applications (many mission-critical) become complex, rigid, and poorly documented, thus making maintenance increasingly complicated and expensive.  Finding resources that understand and can maintain outdated applications becomes very difficult.  As the IT budget is increasingly spent on maintaining legacy applications, less money is available for innovation and modernization. 

 

In the long term, doing nothing is very expensive.  The difficulty (and cost) is compounded when attempting to integrate legacy applications with new applications, platforms, changes in standards, and so on.   Companies have found themselves literally stuck with old applications, unable to purchase and install modern solutions because they cannot be integrated with their current IT architecture.  (Suppliers share some of the responsibility as they reduce product lifecycles and support for discontinued versions.)  Waiting is clearly not the best strategy.

 

Applications Modernization must always be part of a company’s IT business plan.  To stay competitive, IT needs to stay current with changes and developments in the industry. Many companies budget for Applications Modernization only when a situation becomes critical or mandatory (for example when a vendor discontinues support). By this time it may be too late.  The business case for investing in Applications Modernization can be justified using detailed analysis of the company's IT architecture, identification of critical legacy applications, market and competitive demands, an analysis and review of supplier offerings, and the company’s future  IT plans. The business case should also include the impact and cost of not being able to modernize in a timely manner due to factors mentioned earlier.  This is a very dangerous situation; where a company is trapped for an extended period of time with an outdated IT infrastructure and the inability to integrate with other critical application solutions.

 

The issue is not just the cost directly associated with Applications Modernization.  When IT fails to meet business requirements, the company falls behind the competition, misses its revenue goals, loses customers and consequently loses money. This loss of revenue is the ultimate cost of doing nothing.

 

Related information: 

 

 

About the author

 

foto 3x4 francisco.jpgFrancisco Fernandes, Solution Architect, Hewlett Packard Company (Brazil)

Francisco is a Solutions Architect and an Applications Modernization Expert with more than 20 years of experience working on Applications in different industries including banking, financial services, telecom and healthcare. He joined HP in 2002 and is located in Rio de Janeiro, Brazil.

Comments
steve rubin(anon) | ‎03-30-2014 08:13 PM

Hello Francisco,

 

Your blogs - "App Mod and Cost of Doing Nothing" and "IT Uncertainty Problem for the Unprepared" - both make clear that change is constant and must be prepared for (case why our clients must act). This on top of Industry Analysts calling out the same. Yet two fundamental starting points - App TEW (to help client 'stop. listen. think. collaborate' with little investment) and Applications Rationalization - are still far and few between in terms of client adoption. In your client experience, are the advisory messages you speak about resonating beyond generating client education/awareness - are they taking action with you/ES, if so for TEW/App Rat/What type of consulting service are you having success with?

 

Thanks

 

Steve

Fran_Fernandes | ‎03-30-2014 09:05 PM

@Steve

 

We have been having some success with the TEWs. These workshops are great tools (as you mentioned) with low cost to help clients and HP to create a roadmap based on client´s business needs. Apps rat could be part of a bigger roadmap, which TEW could help to design. On top of all that, many clients have been suffering from lack of alignment between business and IT, which have been more evident with the fast pace some new trends are taking. Our speech haven been actually focused on rightstep as a starting point, from a consultative perspective. The TEWs, because of low cost and easy deployment, have been instrumental when the client is not sure they would like to invest on a rightstep engagement.

 

Do you have any thoughts on that?

 

Thanks!

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About the Author
Solutions Architect working at HP since 2002 with focus on Applications Modernization, located at Rio de Janeiro, Brazil
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